FEMIP: The crisis and exit strategies in the Mediterranean partner countries

25-01-2011

The FEMIP Mediterranean countries (FMCs) have reacted well to the crisis. They were protected from a severe financial crisis by the fact that their financial integration – both regionally and globally – is limited. But the shock of the crisis was nevertheless felt. It was transmitted by real effects via four main channels: exports, transfers of income, tourism and direct investment. This shock led to a reduction in growth (by 2 to 2.5 percentage points onaverage), had an impact on employment (with fewer jobs being created and unemployment rates rising again) and on the public budgets as a result of support measures being introduced (with deficits of 7% of GDP on average).